Buying home insurance? Watch out for this!

Gone are the days when cash and gold used to be the only valuable things in an average household in India.

Today, the list of assets in such a household is pretty long: Television, music system, carpets, paintings, washing machine, computer, cell phones, AC, refrigerator, microwave and other kitchen appliances.

The total worth of goods -- 'content' in insurance parlance -- generally found in an average household in cities, runs into lakhs of rupees.

It is, therefore, quite natural for any such family to think of getting these assets insured along with the house to have protection against theft or any other calamity.

However, you may discover to your horror that the house insurance does not provide complete cover to all your house 'content'.

Here's what is not covered under home insurance...

What kind of damage to goods is not covered?

Valuable household goods often get damaged while shifting house or during renovations before festivals.

You may think since your goods are insured and your insurer will pay for any such damage. But that's not true.

Please read the insurance fine print carefully as to under what situations the insurer will pay for damaged goods and under what it will not.

Importance of documents

Even if you have bought a good policy, you need to be careful while filing claims.

In order to accept your claim of damage to any goods, insurers need an undisputable proof.

So, keep all your documents carefully, file complaints for theft or damage as prescribed in insurance policy documents, and collect all necessary invoices and receipts in order to be eligible for compensation.

File claim in time

When you buy a home insurance policy, make sure to ask about the time limit required to file a claim, and the same should be mentioned clearly in your insurance documents.

Abide by the claim-filing time limit otherwise your insurer could well reject your claim.

Non-disclosed valuables are not covered

One upgrades gadgets or buys new things as per changing requirements.

So, it is important that you get registered for upgradation of goods or new things purchased in the list of the items that is submitted to the insurer at the time of buying a home policy.

When it comes to paying claims, insurers go by the list they have, and not what goods you may have in your house at the time of a theft or any damage done to the goods.

All insurers allow you to update the list of goods insured at a certain cost.

Another option is that you can buy content insurance of desired sum insured (SI), say Rs 10 lakh, without giving list of the items you have at home.

At the time of total loss or theft or any other damage, your insurer will pay you up to the SI, even if your content value is more than the SI.

In any case, you must keep invoices of all the items carefully for that will be required at the time of claiming insurance.

Manufacturing defects

Insurers do not provide cover for manufacturing defects in electrical, mechanical, electronic or any other items.

They have their ways to find out if malfunctioning of a gadget is due to manufacturing defect or due to damage done because of theft or some calamity.

So, be careful while staking such claims.

Things that can be included by paying extra premium

Insurers have a provision for enhancing your coverage by paying some extra money.

These riders may relate to allowing some special goods in the list of insurable items, some special circumstances, etc.

A standard home policy does not cover any loss of goods due to theft outside the country. But the same can be covered by taking an add-on or rider with the basic policy by paying a little extra premium.

To know how much you need to pay and what specific conditions are required, you need to compare the available riders with different insurers.

Damage due to floods and earthquake

Floods and earthquakes are a recurring phenomenon in some parts of the country. But damage done to your goods or house due to these calamities is not generally covered in a standard policy.

But insurers allow you to buy add-ons to get such coverage at the payment of some extra premium.

Gold and jewellery

Gold and jewellery are valuable possessions, but these are not covered in a standard policy.

So, if you want these goods to be insured, which you should considering their high value, opt for the gold and jewellery rider with the basic policy at an additional premium.

However, if the worth of your jewellery is more than Rs 250,000, then you need to submit a valuation report prepared by a certified jeweller.

So, as mentioned above, you should consider your specific needs and various situations at the time of buying a home insurance.